Which of the Following Is Not a Separate Performance Obligation

question 129

Multiple Choice

Which of the following is not a separate performance obligation?

• A)A good that the seller could sell separately.
• B)A right of return.
• C)An option for a customer to purchase goods under terms that are more advantageous than those enjoyed by other customers.
• D)An extended warranty.

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Definitions:

Direct Financing Lease

A type of lease arrangement where the lessor purchases an asset for the lessee and rents it out, effectively acting as a financing tool.

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights of ownership of the asset.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its expected useful life in equal annual amounts.

Operating Lease

A leasing agreement for short-term use of an asset, where the lessor retains risks and benefits of ownership.